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MILES O'BRIEN, CNN ANCHOR: It's now about an hour and 15 minutes or so since that bombing in central Jerusalem in a trailer bus which has inflicted several casualties. We're told by the Israeli Ambulance Service at least 20 are dead. We're told by one spokesperson at a hospital that has treated some wounded that he has received at least 50 casualties wounded and among them 15 -- 1-5 of them -- are children. One of them is as young as two weeks old -- 15 children in that attack. Just a couple loose ends to bring you up to date on that story. For more, we turn now to CNN's Michael Holmes joining us live now from our bureau Jerusalem -- Michael.

MICHAEL HOLMES, CNN CORRESPONDENT: Hey, Miles. Yes, those figures still, as you would imagine, this soon after such a bombing, fairly loose.

We've heard from police that the death toll is 15. As you point out, one of the ambulance services is saying 20. We've heard injury reports ranging from 50 to one report of 105 people having been, in the words of the ambulance service, evacuated from the area for treatment.

This was a double-length bus, a very long bus and by all accounts, it was crammed with people. Israel radio has been reporting that many of those on board the bus had come from the Western Wall, a very holy place, of course, for Jews, where they had been observing a religious time there and they were on their way back to an ultra orthodox neighborhood in West Jerusalem.

This happened fairly close to the Green Line. I was actually having dinner not half a mile away when we heard it and heard the ambulances and realized that something had happened very quickly.

A terrible tragedy, especially given the ceasefire, or HUDNA (ph), as it's called, that has been in place since June 29. Clearly, Islamic Jihad, in just the last few minutes, has claimed responsibility for the bombing and claimed it to our CNN people in Gaza and we see that as a very reliable claim. Islamic Jihad claiming responsibility.

Ironically, Miles, this bombing comes on a night when the Palestinian prime minister, Mahmoud Abbas, was in Gaza meeting with representatives of Islamic Jihad to try to encourage them to continue the ceasefire. Islamic Jihad says that this bombing was in response to Israeli raids into Palestinian area, raids that have cost the lives of Palestinians and they say this was, in their words, a justifiable response, Miles.

O'BRIEN: Michael, that would be the specific tit-for-tat there. But when last we heard from Islamic Jihad they were calling a farce an Israeli proposal to withdraw from some of the areas that they occupied in 2002 in the West Bank. Can we link that with this at all or is that presumptuous at this point?

HOLMES: That would be presumptuous, Miles. I think we'll find that they will link it to Israeli military operations in various West Bank towns that have targeted militants from now just Islamic Jihad, but Hamas as well.

And I believe now we have Jerrold Kessel, our Jerusalem correspondent, on the phone. He's at the scene of the bombing.

Jerrold, what can you bring us?

JERROLD KESSEL, CNN CORRESPONDENT: Grim pictures, indeed, and grim situation as the casualty count continues to mount here. We can see laid out on stretchers (UNINTELLIGIBLE) in this south orthodox Jewish neighborhood of (UNINTELLIGIBLE) perhaps as many as 20 bodies covered in these white (ph) bags and we do know -- we saw one being carried away, a very small bag and that's presumably confirmation of what we heard from Israeli medical relief services that at least one toddler was among the people killed.

So the final death toll has not been established, but it could be as many as 20 dead and we know now from hospitals that over 100 have been wounded and eight of those people in serious condition. We do know that there are a number of small children who were among the -- in addition to the dead -- among wounded and among the seriously wounded.

Now, this bus, the stricken bus, Bus No. 2, we understood was now on its way back from the old city of Jerusalem from the Western Wall, the Wailing Wall, where people have presumably gone to be praying late and hitting through into this ultra orthodox religious neighborhood of Me'rh Sharim (ph) and then on through all the ultrareligious parts of Jerusalem and we know that most of the people lived here are lower income, large family people and most of them don't have cars and that's part of the explanation why even though -- this late hour of the night -- it was 9:15 when the bomber struck -- that that bus was that crowded.

So very grim scene, we're seeing all too often such a (UNINTELLIGIBLE). Particularly horrifying one, Michael.

HOLMES: Indeed. Jerrold Kessel there on the scene of this.

And Miles, as Jerrold confirming there are reports that we heard here in the bureau that many of those on the bus were in fact ultrareligious Jews on their way back of the Wailing Wall. Of course, a very holy site for Jews, if not the holy site. Now, you were asking about the withdraw, the planed handover, if you like, of security control to Palestinians. Four towns have been on the table, a couple of cities and a couple of towns. Khalikuliar (ph) among them in West Bank, Jericho, Ramallah, significantly, of course, because that's where Yasser Arafat has been holed, getting on for two years now.

Those talks held up by a couple of technicalities, if you like. They were back on. They were going to start talking again tomorrow. Now I think it's safe to say after an event like this, the Israeli Security Cabinet will meet tomorrow. I would think it very unlikely that those talks would go ahead, given what's happened here this evening, Miles.

O'BRIEN: Michael, you mentioned the Israeli Security Cabinet. Have you heard anything at all officially or otherwise from the Sharon government yet. It's still, I know, very early.

HOLMES: No, not yet. We would expect to get a statement a little later, I should imagine. That's how it normally works. We have had government spokesmen already coming out and obviously condemning this attack and laying it at the feet, if you like, of the Palestinian authority, who Israel says has done nothing to break down the organizations as required in the road map, the militant groups like Islamic Jihad and Hamas. The road map to peace, of course, calling for the dismantling of the infrastructure of these groups. That has not occurred. Palestinian leaders saying that it could lead to civil war and drive these groups underground and would, in fact, engender more public support for groups like Hamas. So it's a very delicate balancing act. But certainly Israeli government spokesman already saying that this is the result of the dismantling, not going ahead, as yet.

Obviously, you know, at a time like this, it's a very -- a human tragedy. But there's also some major longterm political ramifications perhaps, as well, Miles.

O'BRIEN: This comes on the heels -- we have been talking about this -- of a seven week respite in the violence -- that the mood in Jerusalem had relaxed somewhat, had it not?

HOLMES: Yes, it's true. As you know, I've been here many times over the last 18 months, at times of bombing and times of Israeli incursions into the West Bank. And it is a very tense place at times like that.

I've been back for a few days and I detected a far more relaxed attitude. As I said, I was out having a meal in West Jerusalem, very close to the Green Line. The streets were full of people. It's a balmy summer's evening. Lots of young people out at restaurants. The security is there, as it always is. But yes, I think there had been a taking of pleasure, if you like, at the quietness that has existed -- comparative quietness, we must say, because there have been bombings and Israeli military raids into the West Bank. But a comparative quietness in this city, which has seen so much death in the last couple of years, in particular. But I should imagine that the place will very much go back onto full alert -- Miles.